The dispute with Gilead, which Ukraine's Ministry of Justice had characterized as an $800 million dispute, relates to the drug sofosbuvir (sold by Gilead as Sovaldi). Sovaldi, a highly effective treatment for chronic hepatitis C, has been available in Ukraine -- a country reportedly home to over 2 million people infected with hepatitis C -- since 2015, but the company has lately been locked in a struggle over the ability of generic companies to market cheaper versions of the drug in Ukraine.

According to details of the settlement released by Ukraine's Ministries of Justice and Health, the settlement sees Gilead refrain from pursuing its damages claims against the country, and will see the company offer Sovaldi (and a combination therapy called Harvoni) at a reduced price.

Also, following the settlement, a generic competitor of Gilead has seen its own competing drug de-registered by authorities.

By de-registering the generic competitor to Gilead, the Ukrainian government is allowing the US company's to maintain its monopoly on the drug. In Colombia, the Swiss drug company Novartis also used the threat of a corporate sovereignty lawsuit, in this case to put pressure on the government there to stop it from issuing a compulsory license for a key anti-cancer drug, which would allow low-cost generics to be produced:

Leaked letters (PDF) to the Ministry of Trade and Industry show how Novartis threatened to resort to international investment arbitration for an alleged violation of the Swiss-Colombian bilateral investment treaty (BIT), which was signed by both countries in 2006. This undemocratic procedural mechanism, better known as Investor-State dispute settlement (ISDS), forms part of many trade agreements and allows an investor from one country to bring a case directly against the country in which they have invested before a private international arbitration tribunal, without going through local courts first. This threat has undoubtedly influenced the decision of the Colombian health authorities to stop short of pursuing a compulsory license, focusing only on a price reduction.

It's not just drug companies that try to use ISDS litigation to force governments to reverse their policies. Here's an oil and gas exploration company that is unhappy with a decision by the Italian parliament to ban new exploration and production activity within 12 nautical miles of the coast because of concerns for the environment and the high risk of earthquakes:

Rockhopper Exploration is fighting for compensation from Italy after it banned offshore drilling, leaving the company unable to develop one of its oil and gas fields.

The Aim-listed explorer said that it had begun international arbitration against the country for "very significant monetary damages" over the loss of future profits from its Ombrina Mare field.

Since Rockhopper is an oil exploration company, it must have carried out detailed studies on the geology of the field before deciding to drill for oil and gas. Either its geologists were negligent in not spotting that there was a risk of earthquakes which made the area unsuitable for exploitation, or the company knew about the dangers, and decided to continue with its plans anyway. In any case, it's ridiculous that Rockhopper thinks the Italian government owes it money for "lost future profits" that clearly never existed anywhere other than in the company's fantasies.

This is a general problem with corporate sovereignty claims: they often invoke some mythical "future profits" as if those were indisputable and guaranteed. But business is based on rewarding calculated risk-taking, and that includes the risk that hoped-for profits never materialize. ISDS is an attempt to remove the risk of investment from companies, and place it squarely on the public's shoulders, without any quid pro quo.

from the what? dept

The absolute scariest cab ride of my life happened in Rome a few years back, and I'd prefer not to relive that experience, but apparently I might not have much of a choice next time I'm in Italy, as the country recently banned Uber completely, claiming that it was "unfair competition." Now, let's be clear: there are many, many reasons to not like or trust Uber. You certainly have every right to not like the way it goes about its business or the way it treats drivers. You can refuse to use the service all you want and you can tweet #DeleteUber and whatever else you like... and yet you still should be concerned about this.

Uber isn't being blocked in Italy because of its business practices. It's being blocked in Italy because the taxicabs there don't like the competition, and a court has ruled that those cabs shouldn't face competition. Again, no matter what you think of Uber's own business practices, it's pretty damn clear that everywhere that Uber or similar services operate, what everyday people tend to get are better options for transportation. It makes it easier for people to get a ride when they need it, it adds much needed supply to the market, and it tends to be a better overall experience (and there's at least some evidence that it also prevents drunk driving).

In the end, when it comes to innovation, our general stance around here is that what you need more than anything else is competition. Competition drives innovation. It drives better customer service. Having courts come in and block competition in favor of an organization famous for limiting the number of competitors in the market is never going to be a good thing. If you're upset by Uber's business practices, target those business practices. But doing an outright ban on competition doesn't seem to help anyone, other than the legacy taxi providers.

from the zoom-zoom! dept

A years-long fight in Italy between copyright rightsholders (chiefly Hollywood) and consumer groups looking to protect Italian citizens, took a dark turn recently. If you aren't already aware, the Italian government put in place a delightful regulation in 2014 giving the Authority for Comunications Guarantees (AGCOM) the authority to simply block websites deemed infringing outright, without the need for such pesky things as court cases or trials. Consumer groups immediately challenged the regulation, stating that it violated the Italian constitution, specifically suggesting that giving a government body the authority to unilaterally block websites without any sort of judicial review was a violation of the exercise of freedom of expression and economic initiative. Given exactly how often demonized websites are demonstrated to have perfectly legitimate uses, not to mention how absolutely terrible every government everywhere seems to be in understanding and protecting things like Fair Use, it's an easy argument to understand.

The case was initially rejected by the Constitutional Court in 2015, which referred it back to the administrative court of Lazio. Last week this court decided that the site blocking procedure is in line with both European and Italian law. According to the court, the site-blocking regulation is compatible with the European Union’s E-Commerce Directive as well as the Italian Copyright Act. In addition, the procedure doesn’t violate the Italian constitution or fundamental rights in general, as opponents had argued.

Overall the case is seen as a significant victory for copyright holders. Not only can they continue with their site-blocking requests, but the court also clarified that all the blocking costs must be paid by Internet providers.

In other words, it's now open season on sites that rightsholders decide they don't like. No need for a trial in which to prove any actual allegations. No need to prepare a rebuttal from a defendant arguing for their own rights. Instead, rightsholders, such as Hollywood, can petition to have a site blocked and, if AGCOM agrees, the site is blocked without any due process. And, because ISPs are apparently there only to serve failing business models, all the costs associated with these review-less blocks are shouldered by the ISPs.

If you think that the copyright trolls and Hollywood aren't licking their chops to go site-blocking crazy after this decision, you've lost your mind.

“This is a big win for rightsholders,” says Enzo Mazza, chief of the Italian music group FIMI, who says that they have plans to expand the current scope of the blocking efforts.

“Our future goal is now to increase the enforcement of AGCOM to also cover new forms of piracy such as live streaming, stream ripping and similar issues. In addition, we hope AGCOM will extend the blockades to the IP-address level as the Criminal Courts are using now,” Mazza tells TorrentFreak.

And away we go. Licensing groups and rightsholders will now look to slam open the door the court left ajar for them. As the blocks are expanded, you can pretty much count on collateral damage that will harm Italian citizens and restrict their freedom both of speech and access to legitimate internet sites. But no worry, because it's not like there is a court that will oversee all of this. Instead, websites and the surfing public will live only at the pleasure of AGCOM.

from the benvenuto-al-registro-dei-captatori dept

As Techdirt has just reported, even though encryption is becoming more widespread, it's not still not much of a problem for law enforcement agencies, despite some claims to the contrary. However, governments around the world are certainly not sitting back waiting for it to become an issue before acting. Many have already put in place legal frameworks that allow them to obtain information even when encryption is used, predominantly by hacking into a suspect's computer or mobile phone. In the US, this has been achieved with controversial changes to Rule 41; in the UK, the Snooper's Charter gives the government there almost unlimited powers to conduct what it coyly calls "equipment interference."

One of the main tools for carrying out surveillance in this way is the trojan -- code that is placed surreptitiously on a suspect's system to allow it to be monitored and controlled by the authorities in real time over the Internet. There are clearly huge risks and problems with this approach, something that a legislative proposal from the Civic and Innovators parliamentary group in Italy tries to address, as explained by Fabio Pietrosanti and Stefano Aterno on Boing Boing. The draft law is the result of nearly two years' work by a group of experts from many fields:

a former speaker of the Parliament, civil rights activists, law enforcement officers, computer forensics researchers, prosecutors, law professors, IT security experts, anti-mafia and anti-terrorism departments and politicians.

Perhaps that breadth explains why the ideas are really pretty good, for once. The underlying principle is that a government trojan is only allowed to operate in ways that have been explicitly authorized by an Italian judge's signed warrant. For example:

A Telephone Wiretapping Warrant is required to listen a Whatsapp call.

A Remote Search and Seizure Warrant is required to acquire files on remote devices.

An Internet Wiretapping Warrant is required to record web browsing sessions.

The same kind of warrant that would be required for planting a physical audio surveillance bug is required to listen to the surrounding environment with the device’s microphone.

Those kinds of legal safeguards are welcome, but they are not enough on their own. Also needed are stringent technical controls that will limit the harm and risk of introducing government malware onto a system. The working group has addressed this too with a series of innovative requirements for trojan surveillance programs:

a. The source code must be deposited to a specific authority and it must be verifiable with a reproducible build process (like the Tor Project and Debian Linux are doing)

b. Every operation carried on by the trojan or through its use must be duly documented and logged in a tamper proof and verifiable way, using cryptographic time-stamping and digital signing, so that its results can be fairly contested by the defendant during the inter partes hearing [that is, with everyone involved present].

c. The trojan, once installed, shall not lower the security level of the device where it has been activated

d. Once the investigation has finished, the trojan must be uninstalled or, otherwise, detailed instruction on how to self-remove it must be provided.

e. Trojan production and uses must be traceable by establishing a National Trojan Registry with the fingerprint of each version of the software being produced and deployed.

f. The trojans must be certified, with a yearly renewal of the certification, to ensure compliance with the law and technical regulation issued by the ministry.

It's a remarkable list of technical and operational requirements that are surely unique in their attempt to minimize the key dangers of implanting clandestine surveillance software. Of course, it would be better if the use of government malware were avoided completely, and other methods were adopted. But realistically, the police and intelligence agencies around the world will be pushing hard for legislation to allow them to infect people's computers and mobiles in this way, not least if encryption does become more of a problem.

Given that trojans will be used, whether we like it or not, far better to constrain them as much as possible through well-thought out rules such as those drawn up by the Italian parliamentary group. Let's hope their proposals are adopted without significant amendments by the Italian parliament so that they can be used as a template for similar laws in other jurisdictions.

from the but-can-you-define-it? dept

Over and over again, we've talked about the ridiculousness of the moral panic around so-called "fake news" -- a broad and somewhat meaningless term now used to describe just about anything from actual made-up stories, to news articles that have a small factual error, to those with a "spin" that someone disagrees with. And, as we warned, the panic of "fake news" is leading to widespread calls for censorship. A few weeks ago, we wrote about how German officials were supporting a plan to criminalize "fake news" and now Italy wants to join in on the fun. In an interview with the country's antitrust chief, Giovanni Pitruzzella, he argued that it's really time to crack down on the internet, with government wielding the censorship power over whatever it calls "fake news."

“Post-truth in politics is one of the drivers of populism and it is one of the threats to our democracies,” Pitruzzella said. “We have reached a fork in the road: we have to choose whether to leave the internet like it is, the wild west, or whether it needs rules that appreciate the way communication has changed. I think we need to set those rules and this is the role of the public sector.”

Pitruzzella argued tackling fake news should not be left up to social media companies, but instead be tackled by the state through independent authorities with the power to remove fake news and impose fines, coordinated by Brussels, similar to the way the EU regulates competition.

Any time you hear of a plan for the government to be able to remove news stories or impose fines for reporting, you should get very, very worried. That is a recipe for censorship. Yes, blatantly made-up stories are a problem -- but not one that should be dealt with by expanding the tools of censorship in a way that will be abused. We need to teach better media literacy and get more people to understand how to read critically and to do research. Putting tools to censor and fine journalists in the hands of government will inevitably lead to that power being abused. Someone will report on something that makes a politician look bad, and suddenly it will be declared "fake news." We're seeing that happen already -- even without the threat of fines and censorship.

This focus on "fake news" is becoming increasingly dangerous and many of the people screaming loudest about it -- including lots of journalists -- don't seem to realize where it will end. You can worry about truly made-up stories all you want, but if you think the solution to it is to increase the powers to censor and stifle and chill expression, you're not going to be happy with how it boomerangs back on legitimate expression.

from the what-a-stupid-fucking-law dept

Every so often, we see (probably) well-intentioned, but incredibly stupid, attempts to "fight" online harassment and bullying through laws that make saying things that are "offensive" against the law. In the US, such laws (if they actually get passed) are usually thrown out once someone makes a First Amendment challenge over them, but elsewhere in the world there's no First Amendment to fall back on. Over in Italy, some officials have proposed what may be one of the dumbest such laws in history, written so broadly that it will outlaw a lot more than the kind of "cyberbullying" it's supposedly intended to combat:

Under the proposed law, the "site manager" of Italian media, including bloggers, newspapers and social networks would be obliged to censor "mockery" based on "the personal and social condition" of the victim -- that is, anything the recipient felt was personally insulting. The penalty for failing to take action is a fine of €100,000. Truthfulness is not a defense in suits under this law -- the standard is personal insult, not falsehood.

Yes, mockery on the internet could get you a €100,000 fine. Mockery. The internet. The internet is made for mockery. And now is the time that everyone should be mocking this idiotic law -- and the politicians who proposed it without having the slightest idea of how such a thing would be abused all the time. As Cory Doctorow at BoingBoing notes:

... what it will do is create a tool for easy censorship without due process or penalty for misuse. The standard proposed in the bill is merely that the person on the receiving end of the argument feel aggrieved. Think of the abuse of copyright takedowns: online hosts already receive millions of these, more than they could possibly evaluate, and so we have a robo-takedown regime that lets the rich and powerful routinely remove material that puts them in an unflattering light.

As bad as that is, at least it makes censorship contingent on something specific and objective: copyright infringement, which has a wealth of caselaw defining its contours. Indeed, so much that you need to be a trained expert to adjudicate a claim of infringement. But at least you can objectively assess whether a copyright infringement has taken place.

The standard set by the proposed Italian law allows for purely subjective claims to be made, and for enormous penalties to be imposed on those who question them before undertaking sweeping acts of censorship.

There are some efforts under way to "improve" the law by making it not quite so draconian, but maybe, just maybe, the "improvement" should be to recognize that you're never going to successfully outlaw mockery on the internet.

from the well,-at-least-there's-that dept

Back in December, we wrote about a ridiculous situation in Italy, where the site TripAdvisor was fined €500,000 by local regulators because it wasn't magically stopping people from posting "false reviews" on the site. As we noted at the time, it's stories like this that show why, here in the US, Section 230 of the CDA is so important. It makes it clear that you don't blame a third-party website for actions of its users. What the regulators were demanding was an impossibility. There is no realistic way for a user review site to make sure all the reviews are legit, at least not if it wants to allow user reviews, rather than hiring staff to do every review.

Thankfully, an Italian court has now overturned the fine and acknowledged that it was ridiculous in the first place. Rather than focusing on the problems of intermediary liability, the court just notes that TripAdvisor never made any promises that the reviews were accurate:

“TripAdvisor never asserted that all its reviews were true, pointing out instead that it is impossible to exercise a blanket control and inviting users to consider ‘trends’ in the reviews rather than single contributions,” the court said. “We do not understand the harm to the consumer identified by the Authority in its concluding arguments.”

That's good, though apparently a ridiculous counterproductive group called the National Consumers Union who brought the complaint in the first place wants to keep pressing the issue:

The National Consumers Union remained unconvinced, saying it intended to appeal the court’s “crude thesis.”

“We recognize that controlling on the Web may be more complicated than in a physical market, but the law and supervisory activity cannot remain permanently two steps behind current progress,” Massimiliano Dona, the union’s secretary, said in a statement.

This, of course, makes no sense. It's an argument for not the internet, in which anyone can express an opinion, but rather a top-down broadcast system, in which any statement must first be vetted. That would, effectively, destroy much of the power of the internet. It's hard to see how that helps "consumers" in Italy at all.

from the thank-goodness-for-section-230 dept

We've talked quite a bit about the importance of Section 230 of the CDA in the US, and how it protects internet sites from the actions of their users. Some have tried to downplay the importance of Section 230, arguing that it goes too far in protecting bad behavior, or even arguing that it has little impact on innovation. Yet, take a look at the situation in Italy, where regulators are now fining TripAdvisor because some people put up fake reviews on the site:

The American company, which allows travelers to rate hotels and restaurants around the world, has been fined 500,000 euros, or about $610,000, by an Italian regulator for not doing enough to prevent false reviews on its site.

The fine represents one of the first times that a review site has faced financial penalties in Europe or the United States for failing to clamp down on potentially false reviews.

The regulator, the Italian Competition Authority, called on TripAdvisor to stop “publishing misleading information about the sources of its reviews,” and gave the company 90 days to comply with the ruling.

Except, of course, it's not TripAdvisor "publishing" the "misleading information." It's TripAdvisor's users. This is the key point that we've made about Section 230: that it forces people to recognize the difference between a site and its users. In the past, we've even noted that we shouldn't even need a Section 230 because it should be common sense that you don't blame a site for the actions of its users -- but seeing how frequently people do that, the importance of Section 230 is quickly obvious.

TripAdvisor says it's going to appeal the decision -- as it should. Otherwise, it makes you wonder if TripAdvisor should bother doing business in Italy at all. And that would be a real shame. Just last year I visited Italy, and TripAdvisor was tremendously helpful in picking the hotel where I stayed (which turned out to be wonderful). Blaming and fining the site because some people misuse it seems like setting a really dangerous precedent.

On 26 September 2014, The Italian regional administrative tribunal referred the question regarding the constitutionality of the administrative enforcement procedures foreseen by a new regulation on online copyright infringement to the Italian Constitutional Court.

Here's why:

the Regional Administrative Court of Lazio required the Constitutional Court to issued its judgment, since it held that the regulation might be unconstitutional, for violation of the principles of statute and judicial protection in relation to the exercise of freedom of expression and economic initiative, as well as for the violation of criteria of reasonableness and proportionality in the exercise of legislative discretion and of the principle of the court, in relation to the lack of guarantees and legal safeguards for the exercise of freedom of expression on the Internet.

Given that the constitutionality of the copyright regulations is in question, consumer and business organizations -- Altroconsumo, Movimento di difesa del Cittadino and Assoprovider -- have sent a formal request to AGCOM asking for the whole approach to be suspended until a decision is handed down. They argue that this is necessary in order to avoid the high costs that AGCOM would incur from being sued by those who have had their sites shut down, in the event that the regulations are found unconstitutional (original in Italian.)

AGCOM has refused to suspend the regulations completely, but it has slowed down the pace of its actions, as Sarzana notes:

in October 2014, the President of Agcom, Mr. Angelo Cardani, indicated that Agcom shall proceed "with caution" , addressing only cases "of real urgency", pending the case in the Constitutional Court.

Although hardly satisfactory, that does show that even AGCOM realizes that there is a possibility its days of unbridled power to censor sites are numbered. Let's hope so.

from the pitchforks-and-courtrooms dept

It seemed like something from The Onion… or Monty Python: scientists jailed for not predicting the 2009 earthquake in L'Aquila, Italy. Because their risk assessment delivered six days before the quake "failed" to prevent the earthquake from occurring, Judge Marco Billi decided all six scientists were guilty of manslaughter due to their "superficial, approximate and generic" analysis. They weren't held responsible for all 300+ deaths, but specifically for the 29 deaths of people who stayed in their homes (rather than venturing out) because they believed there was "no risk" of an earthquake.

Six seismologists accused of misleading the public about the risk of an earthquake in Italy were cleared of manslaughter on 10 November. An appeals court overturned their six-year prison sentences and reduced to two years the sentence for a government official who had been convicted with them.

We'll get back to that last sentence in a moment, but let us first note that sanity hasn't completely prevailed.

The finding by a three-judge appeals court prompted many L’Aquila citizens who were waiting outside the courtroom to react with rage, shouting “shame” and saying that the Italian state had just acquitted itself, local media reported.

Sure, this could have the appearance of a government body (the National Commission for the Forecast and Prevention of Major Risks) getting an assist from another government body (the court system -- the same court system, mind you, that two years earlier convicted these witches scientists of manslaughter), but it isn't. It's the return to a better, simpler time when scientists weren't charged with criminal activities simply for providing risk analysis.

Now, back to the sentence that wasn't overturned.

The government official still doing hard time is Bernardo De Bernardinis, (then) deputy director of the Italian Civil Protection Dept. Apparently, the panel of judges considered his interpretation of the scientists' risk analysis to carry a bit more culpability. This could be because his interpretation of the scientists' assessment ("We showed a map where L’Aquila is purple, which means the highest hazard") was inexplicably much, much cheerier ("The scientific community tells me there is no danger because there is an ongoing discharge of energy"). As it stands now, De Bernardinis has had 16 charges of manslaughter dismissed, but is still working off the other 13.

Nature notes that, because it might take up to three months for the verdict to be published, we don't really know the rationale behind the acquittals. One would hope the reasoning runs along the lines of "to allow these convictions to stand would be batshit crazy, not to mention a latent threat to scientists all over our country." One of the scientists acquitted noted that it appeared the panel of judges agreed no crime had actually been committed -- which is basically the same thing as above, presumably with more legalese.

And, of course, this is a judicial system so it must be noted that these acquittals can be appealed and Italy may find itself locking up scientists again, much to the general aghastness of everyone.